GBP/JPY Testing a Confluence of Resistance

November 16, 2016

Other than the volaility inspired by last night’s US retail sales beat, we’re looking at more of a pause day as markets take a breath and consolidate around some key USDX technical levels.

While the major news outlets print more baseless Trump-related headlines to fill print, we’ll focus on trading opportunities around quality technical levels. The bottom line is that markets have no idea what his yet to be implemented policies are going to mean for the economy and with uncertainty comes trading opportunity!

We haven’t taken a look at any of the Yen Currency Crosses on the blog for a while and while flicking through our MT4 charts, it was THE BEAST that caught my attention today.

GBP/JPY Daily:
161116_gbpjpy_daily
Click on chart to see a larger view.

I had this channel already drawn onto the daily starting as far back as twelve months ago in 2015.

No matter how many times I see it, I still always find it interesting how the market continues to respect these sorts of support/resistance levels on both sides even if the original pattern has broken or played out.

GBP/JPY Hourly:
161116_gbpjpy_hourly
Click on chart to see a larger view.

Zooming into the hourly and for me, there’s something about that last bullish H1 candle. It’s the last push up into higher time frame resistance and I’ll be looking to use the edges of it as an area to manage risk around when price finally breaks out.

My bias as always is to look to fade the higher time frame level. If it does hold here, selling any hourly pullbacks would be the preferred plan of attack.

Let us know your thoughts on GBP/JPY or any of the Yen crosses with a Twitter mention on @VantageFX.

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On the Calendar Wednesday:
NZD GDT Price Index

GBP Average Earnings Index 3m/y
GBP Claimant Count Change

CAD Manufacturing Sales m/m
USD PPI m/m
USD Crude Oil Inventories

Take advantage of opportunity in the market with Australian Forex broker, Vantage FX.

Dane Williams – @VantageFX

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